Monday, November 28, 2011

Here is some video I recently shot of the Occupy Seattle protest that has taken up residence on the campus of Seattle Central Community College. Located in the Capitol Hill area of Seattle, this neighborhood on Broadway and Pine Street is heavily commercial. Local businesses are not happy with the Seattle encampment, echoing the same opinions from other cities.

If I was writing such a lease, I'd draft not just the words ("No Camping or Outdoor Sleeping Overnight") but also ban all the indicia of camping, like tents, sleeping bags, portable stoves, generators, and the like.

Despite the chantings of the 99%, this review of commercial leases should prove a financial windfall to the 1% who are the partners in the law firms that do this work. If I ran a commercial real estate practice, I'd be sending out friendly "Dear Client, I just checked your lease agreement and guess what I found?" letters to every lessor I knew---here, near, and far.

But what if you are a small real estate property owner with apartment buildings or even single family homes? YOU NEED TO CHECK YOUR LEASES MOST OF ALL. Brookfield Properties can afford high legal bills to evict tenants but many small owners obviously cannot.

My reading of some residential leases over the last few days have very weak provisions with respect to camping in yards, in courtyards, even parking lots. No one really has given this need or provision a great deal of thought. The bottom line, however, is simple.

If you give a tenant use of a public space, you need to carefully regulate the use of that space.

For example, if you let your tenants use the backyard of your apartment building for reading and even cooking (assume a BBQ pit), what stops one of them from inviting some friends to live in his backyard? You might say the lease has been breached, but how? You gave the tenant use but did not regulate what use is permissible. One lease I saw said spaces could be used 24/7 so long as the use was "quiet and not bothersome to others." So if someone is sleeping in the backyard and not making noise is there a breach of the lease?

Check those leases now before you need to check them later. Ask Seattle Central Community College and its Board of Trustees.

Sunday, November 6, 2011

Watch these uncomfortable interviews by Fed Chairman Ben Bernanke and Treasury Secretary Geithner. Both are explaining, or more like making excuses, why the U.S. economy is so weak and, more importantly, why they are cutting GDP growth estimates going forward. Geithner explaining why the U.S. will not lose its AAA credit rating knowing full well it did makes him look completely out of touch with reality.

In fresh quarterly projections, the Fed lowered forecasts for growth and raised forecasts for unemployment for this year, 2012 and 2013. Policymakers do not see the jobless rate, now at 9.1 percent, falling to a level they consider consistent with full employment even by the outer edge of their forecasting horizon, the final quarter of 2014.

Officials now expect the world's largest economy to grow by a tepid 2.5 percent to 2.9 percent next year, down from the rosier 3.3 percent to 3.7 percent they were expecting in June, with inflation muted over the forecast horizon.

They see the unemployment rate going no lower than 8.5 percent to 8.7 percent by the end of 2012, up from the more sanguine 7.8 percent to 8.2 percent range envisioned in June.

Fed officials believe the economy will have reached full employment when the jobless rate drops to between 5.2 percent and 6 percent, with a growing number seeing it at the top of that range. In their forecast, the unemployment rate would still be at 6.8 percent to 7.7 percent at the end of 2014

Bernanke and Geithner complaining that the economy is not growing fast enough reminds me of the endless problems and nonsense solutions of Lloyd Christmas and Harry Dunne, who seem to make more sense in some ways than our high paid public servants in DC. Watch all three clips and you tell me who comes off best, who actually figures out they have a problem and actually comes up with a solution.

Tuesday, November 1, 2011

Since writing this post on real estate gurus Mike and Irene Milin, the self-described "Dynamic Duo" of late night TV infomercial fame, I have a received a steady trickle of updates and news on the pair since they have completed disappeared from the get-rich-quick in real estate world.

This update that arrived in an email yesterday from a reader really intrigued me.

Irene and Mike Milin raising money to elect a former Hawaiian governor to the U.S. Senate?

The actual email contained a great deal of contact information which I have redacted here.

The organization that was listed as the sponsor for this fundraiser confirmed that they indeed were hosting such a brunch. (I redacted this information because it was not relevant to the Milins.)

I am very happy to see that the Milins are continuing their enthusiastic political activism on behalf of the candidates they support. I also note that Lingle is a conservative Republican and I guess so are the Milins these days. It is a bit of trivia to note that Linda Lingle is a Sarah Palin associate and also introduced Palin at the Republican National Convention in 2008 when Palin was nominated for VP.

Here is the video of Lingle's performance:

What I find utterly fascinating about Mike and Irene Milin is not their mediocre real estate investing products or their cheesy infomercials but their dramatic yin-to-yang political conversion from 1970s hippie Communist radicals to 1980s preachers of the capitalist ideal.

As I said before, to go from Karl Marx to Robin Leach of "Lifestyles of the Rich and Famous" in just ten years is a remarkable political and economic transformation. The Milins even boast about this achievement on the rear cover of their most famous book, How to Buy and Manage Rental Properties.

I would love to read the story of their political transformation, awakening, whatever they want to call it. I would gladly buy the book and promote it here.

A very similar book on this same theme of finding a new political identity that I highly recommend is RIGHT TURNS by author and radio show host Michael Medved. How he went from a college leftist and a staff aide for ultra-liberal Ron Dellums to a protege of Rush Limbaugh draws an eerie parallel to the experience of the Milins.